Sterling drifted higher against the euro on Tuesday, but stayed within recent trading ranges after survey data showed that Britain’s services sector stagnated last month due to concerns about Brexit.
The Bank of England is set to hold interest rates unchanged at a policy meeting on Thursday and a national election is less than six weeks away. This means that investors will be watching closely for any changes in opinion poll trends for the major political parties before taking positions on the pound.
The dollar strengthened on a better-than-expected ISM non-manufacturing PMI. Greenback also rose versus safe-haven currencies on growing signs that the United States and China are inching closer to a trade deal.